NFPs seek harmony with government

Not-for-profit directors have called for a more collaborative relationship between governments and the NFP sector, with nearly half giving the government a fail for understanding the sector’s needs.

Not-for-profit (NFP) directors have called for a more collaborative relationship between governments and the NFP sector, with nearly half giving the government a fail for understanding the sector’s needs.

This was one of the key findings of the 2015 NFP Governance and Performance Study conducted by research firm BaxterLawley on behalf of the Australian Institute of Company Directors.

On average, directors gave the Commonwealth Government a score of 4.6 out of 10 for understanding NFPs, with nearly half (48 per cent) awarding it a score of less than five. Directors reported they felt a “big gap between government’s understanding of NFPs and the reality, and also a lack of awareness of the different issues facing each part of the sector”.

The study found that financial stability remains the major concern for NFP organisations, as mergers in the NFP sector gather pace due to major policy reforms and a drive for efficiency.

Speaking at the launch of the study yesterday, Murray Baird, Assistant Commissioner of the Australian Charities and Not-for-profits Commission (ACNC), agreed that there was certainly a challenge for government agencies to understand the sector’s unique needs.

“It is a challenge, but the encouraging thing is that there is an alignment of NFP directors and the ACNC on the commitment to cutting red tape and the desire to have greater harmonisation on the requirements of NFPs for reporting and general obligations,” he said.

The study reports that directors understand the desire from government for an efficient NFP sector, and that sufficient gains in efficiency have been seen in recent times. However, it found that these gains are not reflected in government processes or policies, which are constraining the sector from delivering more innovation.

Baird observed that the ACNC’s work to get traction on red tape reduction slowed for some time because of uncertainty about the future of the ACNC. This uncertainty has been reduced recently, with the Australian Government’s budget papers making provision for funding the national charity regulator until 2019.

“The ACNC is working with other government agencies, including Commonwealth, states and territories, to identify and drive out duplication in regulation,” he said. “We’re looking at solutions such as ‘report once, use often’ reporting framework, the online charity passport, and issues such as the challenges of harmonisation of fundraising and consistent definitions of charity across the federation.”

According to Baird, the ACNC is using surveys such as the NFP Governance and Performance Study to work with NFPs to build the strong, mature and collaborative relationship that the sector desires.

He said that directors in turn could help build the relationship with the ACNC by understanding their regulatory environment and supervising the compliance of their organisation.